ECB under pressure to take action

Washington, September 25, 2011

The US, China and other countries piled pressure on Europe to come to grips with its debt crisis before it risks causing bank runs and pushing the global economy into ruinous recession.

US Treasury chief Timothy Geithner, in his most explicit warnings to date, said it was time for the European Central Bank to take a more central role in fighting the crisis.

'The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally,' Geithner told the International Monetary Fund.

'Decisions as to how to conclusively address the region's problems cannot wait until the crisis gets more severe,' Geithner said.

His warning was echoed by China's central bank governor Zhou Xiaochuan, who urged quick action to bring greater financial stability to the European region.

'The sovereign debt crisis in the euro area needs to be resolved promptly to stabilise market confidence, and forceful and credible fiscal consolidation measures are needed in relevant economies to alleviate sovereign debt stress,' Zhou told the IMF.